Abstract:

The internet has decreased communication costs and has empowered online crowds to create content, generate ideas and obtain different services in an innovative way. Over the last few years, the use of crowds, or crowdsourcing, has expanded to fundraising. This phenomenon is called crowdfunding.

Crowdfunding means collective financing from a large pool of backers, with the common goal to make a certain project possible. This process is conducted through a web platform, Kickstarter and IndieGogo being two of the most popular ones. Crowdfunding projects span a wide range of topics, starting from innovative businesses, to art projects, to social causes.

From an entrepreneur's point of view, traditional possibilities for a startup to obtain funding have been risk investors and bank loans. Crowdfunding takes seed-capital possibilities to a new level, especially within the range of certain type of consumer goods, games and films.

This Master’s thesis conducts a literature review about success factors of a crowdfunding campaign, with an emphasis on reward-based campaigns. A fundamental part of the thesis is the implementation and analysis of a real-world crowdfunding campaign for Ambro Group Oy to launch Ambronite, an organic drinkable meal product. Lessons learned through literature review have been used during the implementation of the actual campaign.

The 60-day campaign conducted between May 4th and July 3rd 2014 was an international success. Ambronite raised USD $102,824 in non-equity crowdfunding and became the most funded food project in the history of the Indiegogo platform. The original goal of the campaign, $50,000 USD, was topped 205.65% by 829 individual contributors from over 30 countries. Ambronite got wide coverage in international media, including the TIME Magazine, Forbes, Business Insider, Wired Magazine and ArsTechnica.

Later, we analysed the results of the campaign and how the techniques researched through literature review worked in a real campaign. The most notable findings were that preparation and community building are keys for success, and that the first few days after campaign launch are crucial. Also, just one article in international media, covering the campaign, can generate a 5-figure boost to the fundraising efforts, while any smaller article might generate next to nothing.

A wealth of resources about crowdfunding can be found on the internet, and most of these are targeted to novices and hobby projects. There is certainly a need for research on preparation strategies of the most successful campaigns, which have been able to raise millions. This knowledge would allow ambitious entrepreneurs to achieve further success and understand how many resources to invest in the preparation stages of a crowdfunding campaign.Internet on vähentänyt kommunikaation kustannuksia ja mahdollistanut joukkojen hyödyntämisen sisällön- ja ideoiden luonnissa sekä erilaisissa innovatiivisissa verkkopalveluissa. Muutaman viime vuoden aikana joukkoistaminen on laajentunut myös rahoitukseen. Tätä ilmiötä kutsutaan joukkorahoitukseksi.